1Content                                                                                                                  ...
25   Production Strategies ...................................................................................... 31    5....
11           Overview and MethodologyThe aim of the case studies in the FutMan project is to integrate and focus the re-su...
22           The Automotive Industry in Europe2.1         Industry StructureThe transport equipment sector is the largest ...
3facturing of motor vehicles is largely done in very big companies (the world’s threelargest companies in 1998 were all ca...
4manufacturers is a fact and one example is Daimler-Benz (D) and Chrysler (USA).As costs continue to increase, partnership...
53           Socio-economic Trends3.1         Conclusions from Developments of Industry StructureIn the preceding sections...
6•   How are the relations between global car manufacturers especially in Europe, US    and Japan influencing the developm...
7“It is also important to make the best use of different ages and combine the right teams and let themlearn from each othe...
84             Technology Trends in Automotive Manufacturing“The main problem of the whole automotive sector is the lack o...
9industry. This was stated by several of the experts as well as in the automotivegroup of the FutMan Scenario workshops.Th...
10Other promising joining technologies for different materials in cars like collar join-ing6 and different variants of sna...
11one of the main drivers of material selection in automotive industry. The followingdevelopments are generally expected8:...
12AluminiumAs the first car manufacturer, Audi started with mass manufacturing of aluminiumbodies for the A2 in 2000.Examp...
13“Extrusion of aluminium can be used in many areas where steel on the contrary needs to be weldedtogether. Accordingly, a...
14Other materialsHybrid materials like foamed metals are also expected to gain importance but com-posites and hybrid mater...
15Which of these technologies do you think have the potential for disruptive changes for your indus-try?“Laser technology ...
16lock in into half-way solutions. At the same time, some solutions that seem to bevery advanced with respect to weight re...
17cially for plastics, is highly interesting. Furthermore, nano-coatings are expected tobring new improved surface quality...
18The changes in components will have an effect on the production methods used(figure 5.1.3-1). Particularly those product...
19national and European level in order to solve remaining technological problems.Many suppliers engage in fuel cell relate...
20There are experts who consider the fuel cell as the micro-chip of the 21st century. Itcertainly is a very promising ener...
21fuel cell is expected to bring a further push for electronic systems in the car.24 Inaddition, the increasing use of car...
22•   Manufacturing of electronic components is changing classical patterns of car    manufacturing. For example, the need...
23technological trends emerging from this struggle will be discussed in the followingsection (for the organisational strat...
24Another trend being pushed by the need for process integration is the near-net shapeprocessing. Near net shape processes...
25engineers do not always easily take up these technologies as an aiding tool but pro-ceed on their usual way of planning....
26SMEs. The competitiveness of the whole European automotive sector is dependingon successful diffusion of advanced manufa...
27“scarcity of people with the right knowledge in software could delay the virtual factory, which weare awaiting” (automot...
284.4           Summary: Technological Items for the Research and              Policy Agenda“The one litre car is possible...
29In the following overview, areas of research topics that can be derived from thetrends described above are listed. Speci...
30•   standards for electronic systems as well as for software and control systems•   man-machine interfaces•   virtual re...
315            Production StrategiesThe companies in the automotive industry follow different strategies in order tocope w...
325.1         Restructuring the Value Chain: Options for Different Ac-            torsThe OEM as a brand owner reduced to ...
33interlinkages – e.g. through the sharing of platforms – may actually be an importantsuccess factor for the automotive in...
34While the restructuring of the supply chain and related strategies are very muchdiscussed with respect to the future of ...
35Figure 5.2-1:              Use of Selected Organisational Concepts by Automotive Suppli-                           ers C...
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  1. 1. THE FUTURE OF MANUFACTURING IN EUROPE 2015-2020:THE CHALLENGE FOR SUSTAINABILITYCase Study: Automotive Industry – Personal CarsINTEGRATION OF RESULTS FOR SELECTED KEYSECTORS Jürgen Wengel, Philine Warnke Fraunhofer Institute for Systems and Innovation Research, Karlsruhe Josefina Lindbom JRC-IPTS, Sevilla Karlsruhe, February 2003
  2. 2. 1Content Page1 Overview and Methodology.............................................................................. 12 The Automotive Industry in Europe................................................................ 2 2.1 Industry Structure ............................................................................. 2 2.2 Trade................................................................................................. 3 2.3 Changes in Market Structure ............................................................ 33 Socio-economic Trends ..................................................................................... 5 3.1 Conclusions from Developments of Industry Structure ................... 5 3.2 Socio-economic Trends Derived from the Interviews...................... 64 Technology Trends in Automotive Manufacturing........................................ 8 4.1 Changes in Manufacturing Driven by Changes in Concepts for Personal Cars .............................................................................. 8 4.1.1 Multi-material Processing................................................................. 8 4.1.2 Processing of Lightweight Materials .............................................. 10 4.1.3 Possible Adoption of Nanotechnologies......................................... 16 4.1.4 Manufacturing and Emerging New Concepts in the Power Train................................................................................................ 17 4.1.5 Manufacturing and Electronics in Personal Cars ........................... 20 4.2 Technological Developments Driven by Demand on Flexibility and Speed ...................................................................... 22 4.2.1 Processes......................................................................................... 23 4.2.2 ICT Technologies in Manufacturing .............................................. 24 4.2.3 Diffusion of Existing Technologies................................................ 25 4.3 Skills and Competencies................................................................. 26 4.4 Summary: Technological Items for the Research and Policy Agenda................................................................................. 28FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  3. 3. 25 Production Strategies ...................................................................................... 31 5.1 Restructuring the Value Chain: Options for Different Actors.............................................................................................. 32 5.2 Flexibility and Customisation: New Techno-organisational Concepts in the Automotive Industry............................................. 34 5.3 E-commerce, globalisation and regional cluster............................. 37 5.4 Options for OEMs to Handle Electronics Production .................... 38 5.5 Personnel Development .................................................................. 406 Sustainability Issues in Future Automotive Manufacturing ....................... 42 6.1 Current Environmental Issues in Car Manufacturing..................... 42 6.1.1 Relevant Legislation ....................................................................... 43 6.1.2 Recycling and Re-Manufacturing................................................... 45 6.1.3 Volatile Organic Compounds ......................................................... 47 6.1.4 ICT Enabling Reduction of Environmental Impact........................ 48 6.1.5 Life Cycle Assessment ................................................................... 49 6.2 Possible Disruptions – Demands on Manufacturing Arising From New Concepts of Mobility.................................................... 50 6.3 Environmental Impact – Some Possible Trajectories of Automotive Manufacturing ............................................................ 51 6.4 Social Sustainability Aspects.......................................................... 537 Governance of Manufacturing: Experiences from Automotive Industry ............................................................................................................ 548 Conclusions and Policy Implications: Challenges for Competitive and Sustainable Manufacturing of Personal Cars in Europe ..................... 57 8.1 Competitive challenges................................................................... 57 8.2 Sustainability Issues in Future Car Production............................... 609 References......................................................................................................... 63FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  4. 4. 11 Overview and MethodologyThe aim of the case studies in the FutMan project is to integrate and focus the re-sults from the analysis of the three projects strands (i.e. materials, transformationprocesses and industrial organisation) for key sectors of manufacturing in Europe.This case study is dealing with the automotive industry concentrating on the manu-facturing of personal cars. To get a picture of the current trends and expected futuredevelopments in the automotive industry, a variety of literature sources was evalu-ated. To underpin the results and to introduce different perspectives, interviews withexperts from the sectors were carried out by the FutMan project consortium. Theinterview partners in the automotive sector were European experts working at dif-ferent stages in the value chain. Approximately 20 of the experts interviewed weredirectly involved into manufacturing of personal cars. Some others could provideinsights into the automotive sector from other perspectives (e.g. automation or in-strumentation). The results of these interviews constitute an important part of thiscase study.This report is proceeding as follows. In section 2 some basic information about thestructure of the European automotive industry is given. Ongoing changes in theorganisation of the manufacturing of personal cars are described. In section 3 socio-economic developments that are driving this sector are identified. Section 4 dis-cusses the main technological trends that are emerging in the manufacturing of per-sonal cars at the moment. As manufacturing is heavily depending on the character-istics of the cars that will be produced in the future, this section is organised alongspecific technological features like materials, power-train concepts and electronicdevices. Another strand of developments is associated with the growing demand onflexibility in manufacturing. In section 5 the focus is on organisational strategiesthat are adopted in the automotive industry to cope with the demands of globalisedmarkets. Section 6 is dealing with sustainability issues. As the FutMan project isexplicitly aiming at „maintaining a competitive and sustainable manufacturing sys-tem“ in Europe the challenges raised by sustainability are given special emphasis.Therefore current and future environmental concerns raised in manufacturing ofpersonal cars, aspects of social sustainability and competitiveness are discussed. Insection 7, the results from the research on governance in the framework of the Fut-Man project are evaluated in respect to car manufacturing. The influence of legisla-tion on the strategies of relevant actors from the automotive sector is analysed. Fi-nally, section 8 summarises the main conclusions and implications for technologypolicy, especially with regard to FP6.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  5. 5. 22 The Automotive Industry in Europe2.1 Industry StructureThe transport equipment sector is the largest sector in the manufacturing industryand within this sector, the manufacture of motor vehicles including their parts,components and equipment is by far the biggest, resulting alone in over 10% of EUtotal manufacturing value. Furthermore, the production of transport equipment isalso of major importance to upstream activities, most notably metal processing,rubber, plastics, electronics, textiles and engineering.The importance of the automotive industry for the Western European market is in-disputable. In 2000, one third of the global production of cars was produced inWestern Europe (i.e. 20 million passenger cars). In 1995, it was by far the industrysector in the EU with the highest number of people employed: 1.2 million personswork in manufacturing and assembling of motor vehicles and over half a millionwork in manufacturing of parts for motor vehicles. Adding up the jobs that are indi-rectly related to the industry, automobile manufacturers employ over 12 million EUcitizens.It is an industry that closely follows the general business activity even though a se-vere downturn in the early 1990s shows how the recession affected the productionof cars even more than the total manufacturing in Western Europe. During this timeperiod, the manufacturing of cars declined while the production of parts and acces-sories experienced a strong growth. During the latter part of the 90s, a general rapidexpansion in production took place as consumer demand recovered, and in 1997,production value totalled over 370 billion euros.According to OECD estimates, the total number of vehicles in OECD countries isexpected to grow by 32 % from 1997 to 2020 and, on a global scale, with 74 % inthe same time period. The European Commission estimates in its White Paper“European Transport Policy for 2010: Time to decide” that the demand for thetransport of goods within the EU will increase with 38 %, and the demand for pas-senger transport by 24 % between 1998 and 2010.The activities are spread out over most Member States but for both sub sectors,motor vehicles as well as parts and accessories, Germany is the largest producerwith about 40 % of the production respectively. The industry is also particularlyimportant in the Swedish, French, Italian, Spanish and UK economies. The manu-FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  6. 6. 3facturing of motor vehicles is largely done in very big companies (the world’s threelargest companies in 1998 were all car manufacturers). In the EU, Volkswagen,Ford (Volvo), PSA Peugeot Citroen, General Motors and Renault are the biggestplayers in the manufacturing of passenger cars.In comparison with the main international actors, the USA and Japan, the patternsdiffer between the two sub sectors. For the production of motor vehicles, the EUwas the leading producer in the Triad accounting for 42 % in 1995 while the USAproduced one third and Japan the remaining quarter. The situation is reversed forparts and accessories where Japan represents half of the production and the USAand the EU produce one quarter each.2.2 TradeThe industry is an important positive contributor to the EU trade balance. In 1999,the trade balance surplus exceeded 30 bn euros. The single most important exporterto the EU is still Japan, even though there has been a slight decrease since the 80s.The USA sells a substantial share of parts and accessories to the EU but the U.S.share of motor vehicles market in Europe is relatively low. For both sectors, severalEastern European countries have become increasingly important and Hungary, theCzech Republic and Poland together have a share of over 20 % of the EU import.The main destination for EU exports is the USA, accounting for more than a quarterof the export of parts and accessories and as much as almost 40 % of motor vehi-cles. Just as for imports, several Eastern European countries have grown in impor-tance as trade partners but also Brazil and Mexico have increased their share. Japanand Switzerland keep being important export destinations for motor vehicles.2.3 Changes in Market StructureA number of manufacturers dominate on the European level. When looking at indi-vidual Member State markets, these are often dominated by domestic manufactur-ers. These tend to have larger distribution infrastructure in their respective domesticmarkets and the customers’ preference for cars produced within the country stillplays an important role. The need to reduce this dependency on domestic marketsand to improve the competitiveness on markets elsewhere is of utmost importance.This is continuously being done, by investing in transplant production facilities andby joint ventures. There has been a reduction in the number of independent manu-facturers, as niche producers have been acquired by high-volume manufacturers. Inthe late 1990s the leading firms grow significantly through mergers and acquisitionsrather than by internal growth. Consolidation between the world’s largest vehicleFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  7. 7. 4manufacturers is a fact and one example is Daimler-Benz (D) and Chrysler (USA).As costs continue to increase, partnerships and alliances are providing a cost-effective method to develop a competitive selection and to reduce dependence ondomestic markets.Investments made by EU manufacturers abroad rose and were close to 40 billioneuros in 1998. Again, Germany is the most active country, carrying out almost 75 %of the EU investment abroad. At the same time, and especially during the beginningof the last decade, there was a high degree of investment by south-east Asian pro-ducers in Europe, often justified as being in anticipation of the creation of the singlemarket.The globalisation process has greatly affected the sector and has resulted in leadingmanufacturers setting up transplants and negotiating alliances throughout the world.This has often lead to the development of transport specific geographical clusters.With an almost saturated demand in mature markets, attention is turned to countrieslike China, Malaysia, Indonesia and India in search of new customers. The denselypopulated countries of south-east Asia are considered as one of the key markets inthe future with increasing mobility requirements and growing prosperity.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  8. 8. 53 Socio-economic Trends3.1 Conclusions from Developments of Industry StructureIn the preceding sections, the European automotive industry was presented in gen-eral terms. It has been shown that the organisation of production processes in theautomotive industry is subject to severe restructuring.The important overall directions were clearly outlined: Concentration of OEMs andsuppliers, further internationalisation of manufacturing, shift of competencies be-tween OEMs and suppliers and further pyramidisation of the demand chain. Nev-ertheless it is by no means clear how the new structures will exactly look like. Manyactors are still struggling to position themselves in the new organisation of thevalue-chain and there are distinctively different strategies for dealing with the chal-lenges of this re-organisation. For European R&D policy it is of importance toknow the different options and to evaluate the effects on the competitiveness ofEuropean manufacturing but also their relation to changing demand patterns.The following questions regarding socio-economic trends are considered to be ofimportance in respect to the objectives of the FutMan project and will therefore befurther investigated in the course of this report:• What does the tiering of the supply chain mean for companies on different posi- tions in the value chain? Which options are there especially for SMEs to position themselves?• What new forms of co-operation are arising? What are the implications of these forms for competitiveness and sustainability?• Are there ways to meet the internationalisation of manufacturing for globalised markets that are more compatible with the aims of sustainable manufacturing than others?• How do different technological options (e.g. ICT technologies, manufacturing processes) relate to organisational change? Are there enabling technologies for more sustainable solutions? Do desirable solutions for the organisation of work require technical developments?• What are the demands on skills and competencies arising from the organisational and technological changes that are expected?• Is the car industry setting or at least influencing socio-economic trends and how?FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  9. 9. 6• How are the relations between global car manufacturers especially in Europe, US and Japan influencing the developments? What does it mean that instead of sim- ple competition there is a complex network of interaction being daily re-shaped by joint ventures, transplants, mergers and changes in capital structure?• Is the diversity and fragmentation of European car manufacturing working as a strength or a weakness?3.2 Socio-economic Trends Derived from the InterviewsMuch has been said about socio-economic drivers in the strand reports and the sce-nario workshops which applies to automotive industry just the same as to industryin general. Nevertheless there are some issues taking a special meaning in the auto-motive sector. In the following paragraphs some items that were mentioned as rele-vant drivers for their industry by the interviewees are listed.Increasing individualisation is driving the need for customised cars with a multi-tude of special features.1 Several experts from the automotive sector think that cus-tomers will be ordering their individual car to be manufactured in 2020.In addition to this, changing values are perceived to influence several differentlines of developments like increasing safety demand.“The overall attitude in society with respect to technology is determining product concepts in per-sonal cars (e.g. technology as toy or "hidden" technology). Especially ideas about replacing tasks ofthe human drivers by technical control systems (up to automatic guiding systems) are dependent onthe direction the public opinion is taking. There seems to be a latent conflict between freedom andsafety and it is still unclear in which direction concepts of personal cars are heading. Current trendsare conflicting.” (electronic system supplier)The ageing of population in Europe means that bigger shares of drivers will havespecial needs e.g. in respect to comfort, support of eyesight etc.. This will effectseveral new features in personal cars.Lack of young workforce in Europe is perceived differently. Automotive manu-facturers are often very attractive to workers because of the high wages so the ma-jority of the companies is not worrying about lack of workforce very much. How-ever, some experts were concerned with the issue and there is a general fear thatEuropean workforce will not be skilled enough in the future when education fundsare reduced.1 cf. (Sun Microsystems Inc., 2000, p.7 ff.)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  10. 10. 7“It is also important to make the best use of different ages and combine the right teams and let themlearn from each other. Generally, older workers have a lot of experience and practical knowledgewhile the younger ones have more theoretical knowledge and are faster”(modules supplier)“In the future it will be a challenge to make the work place attractive and attract and keep the rightpeople.” (contract manufacturer)Resources: It is obvious that oil resources are of special concern for the automotiveindustry. The anticipation of future scarcity of conventional fuels is a major driverfor several technological developments that were described in section 4. Above thisthere seems to be no specific lack of resources. Though the companies are tryingnot to become dependent on one special material. Prices of material resources (e.g.magnesium) are observed closely.Environmental legislation clearly is one of the major drivers of developments inthe automotive sector. This holds especially for the take-back regulations and emis-sions standards. But several other regulatory measures are important as well (seesection 6.1.1)Globalised production is a fact in the automotive sector. Nevertheless the demandfor global production is still driving new developments (see section 4.2).“Environmental awareness has increased but is now no major driver for technological developmentbecause it does not influence the decision to purchase cars. This is because slight differences inenvironmental friendliness are not perceived by the majority of customers. The willingness to spendextra money is mainly dependent on useful extra functions.” (electronic system supplier)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  11. 11. 84 Technology Trends in Automotive Manufacturing“The main problem of the whole automotive sector is the lack of willingness or ability for real inno-vation. R&D is invested mainly in improvement of existing solutions instead of radically new con-cepts.” (electronic systems supplier)In the strand report „transformation processes“ it was concluded that manufacturingis almost entirely reactive to developments in other areas instead of developing onits own line to a considerable extent as well. Particularly, manufacturing is drivenby product trends on the one hand, especially new materials, and by demands fromglobalised markets like flexibility and increasing competition on the other hand.Both drivers are simultaneously shaping the development and adoption of manu-facturing technologies. This is especially true for automotive manufacturing whereseveral new product trends are arising at the moment and which is far ahead in theinternationalisation of production. For analytical purposes we will first discusstechnological trends driven by new features of personal cars. Afterwards (4.2) wewill outline which technological trends in manufacturing are expected to arise as areaction on the rising demands on flexibility and speed.“80% of new developments originate from the automotive sector, thus this will be the driving forcein the future” (materials and mechatronics expert from applied research unit)The automotive industry is a prime sector in driving new technological develop-ments. Because of its high R&D expenses, this industry is determining the direc-tions of research in several areas. Accordingly, many of the technological develop-ments that were outlined in the strand reports as well as discrete transformation pro-cesses are driven by the needs of the automotive industry or at least relevant forautomotive applications.4.1 Changes in Manufacturing Driven by Changes in Con- cepts for Personal Cars4.1.1 Multi-material ProcessingThe adoption of new materials in cars is a very important driver for the develop-ment and implementation of new manufacturing technologies in the automotiveFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  12. 12. 9industry. This was stated by several of the experts as well as in the automotivegroup of the FutMan Scenario workshops.The variety of materials used in automotive design is steadily increasing and thereis a clear trend to use specific materials for specific purposes (multi-material de-sign). Though the quantitative division between advanced and classical materialsdepends on the background described for the trajectories of materials developmentoutlined in the materials strand report by CMI2, it becomes clear that hybrid materi-als and composites will increasingly be used in any of the trajectories. Anothertrend mentioned in the interviews and in the environmental reports of car manufac-turers (though of minor importance in R&D expenditure) is the use of biodegrad-able materials to be used for interior parts.Though the trend to multi-material design or material-mix seems to be universallyacknowledged and is expected to be increasing, it is by no means clear which mate-rials will be the “winners” of this process. Instead it is obvious that there is severecompetition between different kinds of materials to be used in cars especially inlight weight construction (see 4.1.2). Associated with the current competition arepowerful associations of material providers from different regions of the world.“By the way, the steel industry and its aluminium counterparts are not co-operating but fight eachother.” (manufacturer of aluminium parts of the car)As each type of material is connected with specific demands on manufacturing pro-cesses, it is clear that competition between future materials will be accompanied bycompetition between manufacturing processes. In general there is a very strongneed for processes that can be adapted to the needs of different materials and formachines that can be programmed or configured to perform different processes.In addition, there will be an increasing need for new ways of joining different mate-rials. Accordingly, adhesives are expected to gain in importance in car manufactur-ing. For example, in the BMW 7 there is an increase of glue line from 8 to 150 me-ters from one model to the next.3 Newly developed adhesives that are resistantagainst oil are allowing the increasing use of this technology in car manufacturing.4In addition to its suitability for multi-material design, adhesion is reducing weightand increasing stiffness. Especially photo-bondings (adhesives hardening underlight) seem to be of growing interest.52 cf. strand report materials prepared by CMI3 cf. materials strand report by CMI and ( 2002d)4 Nevertheless the contact with oil from other processes has to be very limited. Another problem is warming of adhesives through welding of neighbouring parts. (e.g. 2002c)5 cf. ( 2002f)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  13. 13. 10Other promising joining technologies for different materials in cars like collar join-ing6 and different variants of snap fastening are arising. These processes are non-thermal, do not need any lubrication and can be combined with adhesives. Alsocoated materials can be joined.As was pointed out in the materials strand report, the need for specific materials forspecific functions will lead to an increasing integration of materials design into thedesign of manufacturing processes. Costs will be reduced by adapting processesespecially designed for specific materials (see materials report prepared by CMI).There will be a simultaneous optimising of product, process and material properties.In this optimisation, modelling and simulation will play a very important role. Anumber of experts named the improvement of the interface between production,process and material properties via simulation as a prime research issue in order toenhance competitiveness of European car manufacturing.“adhesion means application of additional material between components. This is problematic formaterial quality as well as for environmental reasons. Therefore (laser)welding of plastics is thebetter solution” (manufacturer of machine tools for laser welding)From a recycling point of view, multi-material design is highly problematic. Themore different materials are being used in a product, the more difficult and expen-sive are the re-manufacturing and recycling processes. Neither is it clear how dif-ferent new joining technologies relate to recycling demands. Nevertheless, recy-cling can be enabled by some measures like labelling the materials used and consid-eration of re-manufacturing at the development of new joining methods. For exam-ple, some adhesives are loosening when heated and this enables easy recycling. Thisaspect should be stressed in any research support measure. Accordingly, joiningtechnologies for new materials with a view to recycling ability were also consideredas one of the two most important cross cutting issues for research priorities by theautomotive group at the scenario workshop.4.1.2 Processing of Lightweight MaterialsIn order to reduce the fuel consumption, designers in the automotive industry areaiming at reducing the weight of cars as far as possible. By 2020, the weight of acar is expected to be reduced by 17% (250 kg).7 Accordingly, weight reduction is6 Mechanical process where a collar is produced in a sheet metal by pressing a punching tool through it. The plastic component can then be joined to the metal sheet by simple pressing (similar to clinch technology)7 cf. (Mercer und HypoVereinsbank, 2001b)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  14. 14. 11one of the main drivers of material selection in automotive industry. The followingdevelopments are generally expected8:• Body-Exterior: use of aluminium, magnesium and plastics in the very near future• Body-Structure: metal foams (2003), steel/aluminium-space-frame (2004), sandwich-structure (2005), composites (2006), plastics (2015).However, especially with respect to the body structure, it is by no means clear towhat extent these advanced solutions will be applied. Some of these technologiesmight be confined to niche-cars and there are experts who reckon that the conven-tional steel frame will stay on the market for quite some time. When manufacturershave decided for a certain materials concept for car bodies, they are likely to staywith it for quite some time instead of switching to the next trend.The scenario automotive group expects a general increase in the use of aluminiumand magnesium. Additionally, the emergence of other lightweight materials is ex-pected in case the political background is characterised by a high degree of con-certed policy.“As of 2007 and onwards, coated and completely coloured plastics (fully recyclable) will have abreakthrough in personal cars ... This will need completely new competencies from designers.”(automotive OEM)MagnesiumWhile magnesium is considered to have increasing importance but is confined in itsuse for niche applications, aluminium is widely expected to be of growing impor-tance in all areas of car manufacturing.9 However, some studies are expecting a riseof average magnesium share in a car from the current ca 2.3 kg up to 113 kg.10There are advantages with magnesium such as the low weight (one third of theweight of aluminium), but also disadvantages such as high costs and safety prob-lems in processing the material. Nevertheless, prices are expected to fall fromaround 2010 due to expanded use of resources in China.“The introduction of magnesium-alloys will require completely new production technologies, forexample, magnesium can not be formed easily”(Materials and Mechatronics expert from researchunit)8 cf. (Mercer und HypoVereinsbank, 2001a, p. 7 ff.)9 For detailed information on different alloys cf. CMI strand report on materials10 These figure were obtained for Ford. Cf. e.g. ( 2002i)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  15. 15. 12AluminiumAs the first car manufacturer, Audi started with mass manufacturing of aluminiumbodies for the A2 in 2000.Examples for advanced aluminium applications in cars:components processesDoor: die casting, extrusion, pressRange Rover, Opel Omega joining: mix from adhesion, welding, riveting, screwing11Audi A3 laser-weldingMotor parts sinteringFull body:Audi A8, A2 hydroforming, laser weldingThe use of aluminium depends very much on the development of adequate proc-essing technologies. High investments are necessary to switch to a new material incar manufacturing. For example, it is reckoned that Audi planned for five years andinvested more than 150 million Euros for their new aluminium manufacturingsite.12“The aluminium car industry today would gain very much in competitiveness if the extrusion tech-nology could be developed further and there are many aluminium automotive industries in Europe”(aluminium parts supplier)For aluminium, the main processes being currently under investigation are: laserprocessing (detailed discussion see below), extrusion processes (see material strandreport by CMI), hydroforming13, flow-forming (a kind of rolling which is doneimmediately after casting)14, compact-spraying (a powder-metallurgy process),foaming and sintering.From the environmental point of view, there are two aspects to be considered withrespect to aluminium. On the one hand, it needs a high amount of primary energyfor its production. On the other hand, it can be reused at a high energy level whichgives it an advantage over plastics in recycling (magnesium has roughly the sameadvantage). Overall, with increasing taxes on energy use, aluminium is becoming amore expensive material.11 cf. ( 2002a)12 cf. ( 2001)13 A process where tubes are formed into very complex structures by extremely high pressure. This process is also interesting because it reduces process steps and parts needed.14 cf. VDI nachrichten 2002hFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  16. 16. 13“Extrusion of aluminium can be used in many areas where steel on the contrary needs to be weldedtogether. Accordingly, aluminium profiles can have varying/floating thickness which is a clearbenefit.” (aluminium parts supplier)“There is still a growing demand for low fuel vehicles in combination with recyclable materials.Thermoplastics are light, strong and in this aspect good for automobiles but they can not be recy-cled. That is where aluminium comes in. It weighs a third of steel and even though thicker parts areneeded than for steel, the total weight is much less.”(company producing aluminium chassis)SteelSome interview partners pointed out that the variety of steel offered is steadily in-creasing which means that there is also a high potential for light weight steel appli-cations in the automotive sector. In particular, highly compact steel products arecompeting with aluminium. Because of their high strength, their use is also inducingimportant weight reductions.15 In addition, steel is cheaper than many other materi-als and easy to recycle. The steel industry has started a special initiative to developsteel light weight concepts for cars and promote it to the automotive industry(ULSAC – Ultra light steel auto closures).PlasticsThere is a heavy competition between plastics, composites and light metals to beused for several purposes in personal cars. Several car manufacturers have started touse plastics for parts of the body.There is particularly one possible usage of plastics, which could lead to a disruptivechange for automotive manufacturing. If plastics can be coated and coloured “fromthe beginning”, paint-shops that today account for a substantial part of the automo-tive manufacturing process might vanish.Nevertheless, the use of plastics raises several questions with respect to recycling.To make re-use possible, it is important to use only a limited number of plastics andto label the components (see also section 6.1.2).“Use of plastics will mean a complete restructuring of manufacturing. Issues like clean roommanufacturing will arise. New joining technologies will be needed. Plank concepts will have to beadapted. Automation will be much higher.” (OEM manufacturing planner)15 cf. 2002e and 2002gFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  17. 17. 14Other materialsHybrid materials like foamed metals are also expected to gain importance but com-posites and hybrid materials are generally difficult to reuse. It is therefore recom-mendable to integrate recycling considerations into research projects dealing withlight weight construction, just as for multi-material processing.Regarding new materials, as one of the interviewees pointed out, there are severalpossibilities for weight reduction that have not even been investigated by now be-cause of high costs. For example, titanium has a high potential as a light weightmaterial but is much too expensive at the moment. Another promising material thatis considered for automotive applications only in very pre-application projects iscarbon composite, which is expected to bring weight reductions up to 40%.16LaserThe necessity to use plastics, hybrids and composites has brought about a variety ofnew processes. A key technology for processing light weight materials is laserprocessing. Laser welding has revolutionised the manufacturing of cars as severalmaterials can be welded with a high degree of safety and exactness. The applicationof laser welding in serial manufacturing is rising at the moment and is expected tobe further expanding according to literature as well as by several of the experts in-terviewed.17 While laser welding and cutting of conventional blank sheets and lasercracking of motor parts are already widely implemented, the processing of innova-tive materials like foamed metals is currently under way. Application of laser tech-nology to plastics and composites as well as to several alloy metals and hardenedmaterials is heavily investigated at the moment and even processing of copper forelectronics applications is considered. For example, regarding plastics, VW is usinglaser welding robots for cutting covering plastics. Automotive suppliers are in-creasingly using laser welding for plastic housings (e.g. of electronic components).Furthermore, laser soldering and laser welding for micro applications like sensorsare being tested.For all these advanced applications, process control and quality control are key is-sues. Digital image processing is essential for testing welding seam quality.18 Sen-sors are of high importance to enable such control concepts as a variety of parame-ters have to be surveyed with a high degree of exactness. Furthermore, new kinds oflaser sources have to be investigated to allow further applications.16 The EU project “Tecabs” (Technologies for carbon fibre reinforced, modular, automotive struc- tures) which is co-ordinated by Volkswagen is dealing with this issue.17 E.g. the new Audi A2 has 30m laser weld seams18 cf. ( 2001)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  18. 18. 15Which of these technologies do you think have the potential for disruptive changes for your indus-try?“Laser technology for joining materials. To some extent it is available already today, but it is veryexpensive. This will develop in the future and will result in decreased usage of material since withthis technology, two materials (or pieces of materials) can be joined lying next to each other withoutoverlap (which is the case with today’s joining technologies).”(Automotive systems supplier)Apart from the mentioned positive aspects on safety, laser technology is also ad-vantageous for high degrees of automation (see below) and supports process inte-gration. Furthermore, it is extremely fast and flexible. Because no tools are needed,there is no wear out. Laser technology therefore seems to be a key process for com-petitiveness of manufacturing of personal cars in Europe.“Lightweight construction is driven by the need for highly automated production athigh wage locations” (OEM manufacturing planner)As one expert mentioned, not all manufacturing processes are equally easy to auto-mate and therefore suitable for production in high-wage locations (see also strate-gies section). Therefore, choice of materials which go along with certain processeshas an impact not only on the nature of the jobs in car manufacturing but also on thelocation of these jobs. The expert thought the application of highly automated lightweight manufacturing essential for the survival of European car manufacturing.ConclusionsIn summary it can be concluded that there is a multitude of trends in light weightconstruction and that some developments are heading in different directions. At themoment, it can not be foreseen in which state light weight construction in car manu-facturing will stabilise. Nevertheless, it is clear that the direction of change willhave major impacts in the following areas:• car manufacturing processes and therefore on the opportunities for machine tool manufacturers and automotive suppliers• recycling possibilities and environmental burden• employment issuesAccordingly, there is an urgent need for innovative concepts for light weight designand manufacturing that takes into account the whole vehicle life cycle includingmanufacturing. Therefore, in the interest of competitiveness and sustainability, it ishighly recommendable to investigate this area more closely. The high degree ofuncertainty at present about life cycle developments at the same time makes it pos-sible to actually affect developments in this area. For example, it might be worth-while to invest into one of the more far reaching alternatives instead of risking aFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  19. 19. 16lock in into half-way solutions. At the same time, some solutions that seem to bevery advanced with respect to weight reduction might lead to outsourcing of manu-facturing operations or bring up new recycling problems.4.1.3 Possible Adoption of NanotechnologiesIn the materials and transformation processes strand reports, future applications ofnano-science were discussed in detail. Several of the applications named there areof relevance in the automotive industry.As sensor technologies are considered to be of high importance for the cars them-selves as well as for manufacturing processes19, nanotechnologies that enablesmaller sensors with higher sensitivity would allow for major progresses in theautomotive sector. Example of applications mentioned by the experts were howsensors could be used to tell the driver when he comes too close to the car in frontof him and when to brake or not etc.Other impacts are expected with nano-powders20 that help to improve powder-metallurgy methods. This would certainly have an effect on the industry since pow-der-metallurgy is widely expected to be increasingly used in car manufacturing.Nevertheless, is has to be diligently considered if or how nanopowders can be recy-cled. If this issue can not be solved, these methods are not likely to be taken up inthe automotive sector since there is a strong pressure to recycle large parts of oldcars (see section 6.1.2).In the interviews, the main issue raised in connection with nano-technology wascoating and painting. The majority of the automotive experts that were interviewedexpected applications of nanotechnology in car manufacturing in the time period upto 2020 in this area.New coatings for chassis and body as well as for other parts, which would result inharder and stronger material would at the same time allow for thinner materials and,thus, lighter cars.There is a major effort of car manufacturers to replace current coating methods toreduce VOC emissions (see all environmental reports listed). Several car manufac-turers have developed alternatives to classical painting methods, but most of themare still difficult to apply universally. Therefore, the use of nano-coatings, espe-19 This was pointed out especially in the strand report transformation processes.20 A detailed explanation of nano powders can be found in the strand report materials Annex IFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  20. 20. 17cially for plastics, is highly interesting. Furthermore, nano-coatings are expected tobring new improved surface quality and to add interesting features to the surfaces.Examples for this are:• Dirt repellent coatings for lights and window screens• Self cleaning coatings• Shining foils• Tire coatings improving adhesionMoreover, with nano-coatings used to improve tooling, as was suggested in thestrand report for transformation processes, this will be of high importance to theautomotive sector due to the fact that new tools are needed to meet the increasingdemands on fast processing of different materials. New tool coatings would be evenmore interesting – due to cost considerations as well as to environmental concerns -if coolants or lubricants can be avoided or reduced through their use.4.1.4 Manufacturing and Emerging New Concepts in the Power TrainThe car industry’s answer to the request of making the transport system more sus-tainable is not least the development of new propulsion systems. There are severaldirections taken, from the incremental innovation of the traditional combustion en-gines via the use of alternative fuels like natural gas and synthetic as well as renew-able fuel up to electrical power using hybrid concepts. The most radical and in-creasingly probable change is the use of fuel cells. Therefore, in the following,changes and challenges connected with this innovation are elaborated.The fuel cell implies considerable technical changes throughout the sector and thiswill also have far-reaching impacts on the related equipment producing industriesconcerned with the motor and its periphery (cf. Wengel/Schirrmeister 2000). Thedrive train and motor accounts for around one third of the value of a car. Demandwill tend to shift away from mechanical parts such as crankshafts, cylinders andpistons, towards process-technical and electro-technical components such as electri-cal motors or gas generating equipment. There will thus be completely new manu-facturing processes for car engines. An important question is how the traditionalinnovation partnerships between automotive companies and machine tool manu-facturers will react to that challenge. These co-operations mark a leading edge ofmachine tool innovations and are also a stronghold of European manufacturingsectors.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  21. 21. 18The changes in components will have an effect on the production methods used(figure 5.1.3-1). Particularly those production methods required in the combustionengine (because of strain due to temperature and rotation, such as die casting,grinding and honing), will only be necessary to a smaller extent in fuel cell drivesystems. Other technologies will grow in importance, for example, punching couldbe used in the production of the stacks for the fuel cell and the gas production unit.Figure 5.1.3-1: Changes in Manufacturing Technologies Due to Fuel Cell Tech- nologyDecreasing importance Increasing importanceMuch less mechanically stressed or rotating More identical parts to be mounted, anddrive and transmission components: exposed to chemical stress:• die forming, • chemical coating, printing,• tension arm annealing, • catalytic coating,• hardening, • stacking, clipping• smooth rolling, • high temperature soldering, adhesion,• grinding, • deep drawing,• honing • bending, become less important • stamping become more importantIn the case of vehicle electric parts suppliers and their outfitters, we will see, forexample, how although the starter and dynamo will be omitted, electric motors fordriving the compressor, cooling and metering pumps as well as the reluctance motorwill be required. Technologically considered, these are similar components. For theoutfitter, this means that he will not have to provide any fundamentally new manu-facturing technology to the supplier in order to remain part of the innovation proc-ess. Outfitters for suppliers who produce conventional components which are to beadapted do not have to fear any technological innovation leap since their buyers willnot be confronted with this either. However, quantitative adaptations may take placedue to the need for either extensive outfitting investment in, for example, the largercooling system, or less extensive investments, which is to be expected for the sim-pler construction of the transmission (fewer gears).Many automobile manufacturers are engaged at present in very intensive develop-ments of fuel cells. They however follow different strategies (see figure 5.1.3-2).While some go for a largely internal development of the technology (e.g. Toyota,GM) others co-operate with specialised companies (e.g. DaimlerChrysler/Ford andBallard). Some are more reluctant (VW), others concentrate on the application asauxiliary power unit, APU (BMW). In parallel, joint research is performed in dif-ferent consortia including universities and specialised research labs on regional,FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  22. 22. 19national and European level in order to solve remaining technological problems.Many suppliers engage in fuel cell related R&D as well. In many cases this is tomake up for anticipated losses in their traditional markets around the combustionengine, but there are also completely new players.Figure 5.1.3-2: Fuel Cell Strategies and Co-operations in Automotive Industry Close cooperation but each own Cooperation, shares stack development French Ballard, Ecostar, Xcellsis research initiative Car production at Ford 33% share in Mazda Toyota Hyundai PSA Renault Volvo Ford Mazda EvoBus FIAT GM/Opel BMW MAN VW DC Mitsubishi Nissan Honda Rover IFC Delphi De Nora Siemens Ballard Plug Power Cooperation/involvement own stack development Celanese individual stacks delivered fixed supply contracts Source: Marscheider-Weidemann 2002Depending on the make-or-buy decisions of the car companies and the necessaryeconomies of scale, particularly in the early phase of diffusion, production will beconcentrated either close to the lead market, which could well be California or inthe country of competence, which could be Canada where Ballard has already builtup relatively large manufacturing capacities. Even though the diffusion will beslow, there is a considerable loss of markets for traditional automotive parts on thehorizon.Figure 5.1.3-3: Challenges of the Fuel Cell to a Fragmented Innovation System R&D – New materials – Contro /sensor technologies – System integration – Simulation – ... Manufacturing Use – New manufacturing technologies – Infrastructure development – Re-organisation of supply chain (repair and maintenance , fuel supply ,...) (re-definition of core competencies and division of work ?) – New car concepts and distribution (car as powerstation , leasing ,...) – Integration/ co-evolution of sectors (e.g.: energy equipment and cars )FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  23. 23. 20There are experts who consider the fuel cell as the micro-chip of the 21st century. Itcertainly is a very promising energy converter and a system innovation, whichposes strong challenges to the fragmented European system. In order to achieve thecost targets and to minimise application barriers, the innovation process to the fuelcell requires parallel break-throughs in fields like: manufacturing (technological aswell as organisational, possibly virtual factories); research and development (par-ticularly materials (see also CMI materials strand report) and system integration)and infrastructure (not only fuel cell but also maintenance skills and innovativesales and car concepts). It will continue to be difficult for quite some time to reachsatisfactory manufacturing batches. Other applications will most likely be commer-cialised before the automotive application. Consequently, integrated policy ap-proaches on different levels, involving different fields and using different instru-ments are necessary. This is particularly true as the full environmental benefits onlywill occur if the whole fuel chain up to the final provision of hydrogen is stronglybased on renewable and clean sources (cf. Weiss et al. 2000).4.1.5 Manufacturing and Electronics in Personal CarsHard facts show how important electronics is for the car industry, for performanceand cost. For example, in 1995, the world-wide automotive electronics industry wasgrowing faster than telecommunications. In 2000, 20 million cars were produced inWestern Europe, each containing on average five to six electronic systems worthseveral hundred Euros. It is suggested by the UK Forecast that the number andvalue of automotive electronic system will grow at 10% p.a., so that early in thiscentury, electronic systems will account for at least 15 % of the vehicle value.21The use of semiconductors and sensors is expected to grow dramatically. Moreover,the future will see more business links between the automotive and telecom indus-tries to offer in-vehicle communication services. The car is becoming an integralpart of these emerging services, which can give access to individual traffic andnavigation information, breakdown assistance and automatic emergency calls andtraffic control to avoid congestion (and thereby decreasing fuel consumption andlowering emissions).Telematic systems and x-by wire22 concepts are named as major drivers for theincreasing use of electronic components in cars.23 Furthermore, the advent of the21 See also (Mercer und HypoVereinsbank, 2001c) where it is forecasted that in 10 years the market volume of electronic components in car manufacturing will have grown by 115%. (13-5)22 x-by wire is used as an umbrella term for concepts were mechanical systems in personal cars are replaced by electronic ones. This embraces drive-by-wire, brake-by-wire and steer-by-wire23 For a view from the German Association of car manufacturers (VDA) on telematics see for ex- ample (Verband der Automobilindustrie: AUTO Jahresbericht 2001, p.108, 111, 113). An ac-FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  24. 24. 21fuel cell is expected to bring a further push for electronic systems in the car.24 Inaddition, the increasing use of cars as “office” is fostering the integration of elec-tronic devices into the car’s interior.From the results of the automotive scenario working groups, it becomes very clearthat electronic systems in personal cars might evolve on very different trajectoriesdepending on the development of the socio-economic background. For example, itcan be expected that there will be very sophisticated IT systems in the car to enablemulti-modality when public and private sector work together effectively. Differ-ently, in more fragmented and individualistic futures, electronic components willserve to add features to cars that enable their owners to differentiate themselves. Itcan thus be concluded that the share of electronics in cars will be rising regardlessof how the specific applications will look like. This means that the ability to dealwith electronic components in personal cars will become ever more important in thefuture.“the car like one big computer ... ” (contract manufacturer)At the moment, manufacturing of electronic components is posing several techno-logical challenges as well as organisational problems to companies in the automo-tive sector. It is still unclear whether there will be a major effort by automotivecompanies to take on electronic production as a new core competency (see alsostrategies section). Considering the multitude of issues and applications, it is to beexcepted that, if such an effort is made by European car manufacturers, this will bea major push for electronics manufacturing in Europe, which, at the moment, is notvery strong.25The following technological issues are raised by literature and interviewees (for theorganisational challenges see section 5.4):• Integrating electronics in the car almost always means thinking in mechatronics systems since, in the end, there are always mechanical components involved.26 Accordingly, mechatronics is considered as extremely important for car design and manufacturing. It is mentioned how mechatronics poses high demands on interdisciplinary thinking and communication abilities (see section 4.3). count of the European perspective can be found in the IPTS Futures technology map, p. 50 and 5824 cf. Marscheider-Weidemann et al., 2002 and Wengel and Schirrmeister, 200025 This consideration is further elaborated in section 526 Mechatronics is mainly understood rather as a concept than a specific technology. The main feature of the concept being to think of electronic mechanic and other (pneumatic, hydraulic, magnetic etc.) components as an integrated system instead of a coupling of componentsFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  25. 25. 22• Manufacturing of electronic components is changing classical patterns of car manufacturing. For example, the need for clean room production poses difficul- ties for today’s car manufacturers.• Standards are a major problem for the development of electronic components and in this respect. Systems integration is the main future challenge.• Simultaneous development of hardware and software is highly problematic. There is still no general quality standard for software systems in car manufac- turing.• There is a trend towards integrating electronic components directly into plastic parts of the car like instrument panels (“molded interconnect devices”).27 The use of flexible interconnects might save manufacturing steps and soldering points. However, this needs new repair concepts on the OEM side. The impact on recycling is still unclear.• With electronic components increasingly used close to the motor block, there will be a need for high temperature electronics, which will require other materi- als than silicon.• Failure of electronic components is becoming a major reason for car break- downs. Repair concepts therefore have to be adapted to the increased use of electronics.• Small scale manufacturing of electronic components might be a way to establish electronics as a competency of automotive manufacturers (OEMs and system suppliers).“Sure, OEMs would like to do electronics by themselves. It’s just that their quality control is much tobad and their software standards are much to confused to do this.” (Electronic systems supplier)4.2 Technological Developments Driven by Demand on Flexi- bility and SpeedThe automotive industry is under pressure to perform extremely fast and in a flexi-ble way. Both factors are driven, on the one hand, by an increasing demand of indi-vidual cars for special purposes and, on the other hand, by tightening competitionon globalised markets. Lead times and product life cycles have become significantlyshorter. Hence, flexibility as well as speed requirements are widely perceived as themajor current and future drivers of automotive manufacturing. The automotive in-dustry in Europe is struggling to fulfil these demands. Several companies are en-countering severe problems in combining quality and speed requirements. The27 cf. 2002bFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  26. 26. 23technological trends emerging from this struggle will be discussed in the followingsection (for the organisational strategies dealing with these issues see section 5).“There are normally 1-2 years between the client’s request to the actual deliver. This time span hascontinuously shortened since the car manufacturers decide as late as possible but keep the startingdate for assembling the car (we get sort of squeezed in between which again calls for standardisedsolutions).”(producer of assembly lines and other equipment for automotive OEMs)It should be noted that short life cycles of cars, rising multitude of variants as wellas short development times are by no means “natural laws”. They are the result of acertain way of globalised manufacturing and use of cars, which may not be the mostsustainable choices. This section can therefore be interpreted in two directions. Onthe one hand, measures can be taken to help the European automotive industry tomeet the demands of globalised manufacturing in its current face. On the otherhand, it can be attempted to change the political background to strengthen otherforms of globalisation.This twofold perspective is also present in the results of the automotive workinggroup at the scenario workshops. The working group expects flexibility demands tobe further rising if the socio-economic background leads to an increasing emphasison individual values. This goes along with an emphasis on modular production.Nevertheless, the number of variants is expected to increase even when there will bea high degree of collective values. Regarding speed, the focus in this case is moreon updating of existing mobility solutions than on fast exchange of cars. Demandson flexibility and speed are dealt with through multi-local organisational solutionscombined with sophisticated technological applications.4.2.1 ProcessesThe increasing need for speed in production is enforcing an integration of proc-esses. It is sought to reduce the amount of manufacturing steps and to apply proc-esses that do not need specialised tools, but can be adapted to different functions byprogramming. The whole manufacturing chain is radically changing to achievethese aims. While OEMs are most concerned with time to market and fast ramp up,suppliers need to adapt to fast changing demands of OEMs and contract manufac-turers. The latter, which are manufacturing for different OEMs, again have veryspecial flexibility needs.A clear „winner“ in the competition of fast and flexible processes is laser technol-ogy which is extremely fast and flexible and can be highly automated. Accordingly,laser processes are increasingly used (also because of their suitability for many dif-ferent materials (see above)). Hydroforming and pressing with high forces are alsoexpected to gain importance as they reduce the number of manufacturing steps.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  27. 27. 24Another trend being pushed by the need for process integration is the near-net shapeprocessing. Near net shape processes have been considered as one of the two mostimportant cross cutting issues for research priorities by the automotive workinggroup at the FutMan scenario workshops. This is very much in line with the resultsof the interview analysis. It is sought to use casting processes to get very near thefinal form with only the minimum of finishing operations. Powder-metallurgy proc-esses like sintering are expected to become even more refined and to rise in impor-tance in the future.28 These kinds of processes can be combined with rapid manu-facturing concepts. From an environmental point of view, this is also interesting asmaterial and energy can be saved. However, some powders might be difficult torecycle. It was mentioned how these processes easily can be adapted to concepts ofregional localised production.For all these new processes, it is, again, simulation and modelling that are enablingprogress. However, a better understanding of the processes involved is needed tooptimise their performance via simulation.29“Major topic for research on a European level: Simulation of forming processes especially bendinge.g. of magnesium. Actors from software suppliers as well as manufacturers have to be in-volved.”(automotive OEM)However, it is not just processes alone that are enabling flexible and fast manufac-turing of cars. At least as important are innovative concepts of manufacturing or-ganisation that are implemented at car manufacturers to realise mass customisation.The main concepts under way are modularization and platform concepts (see sec-tion 5).4.2.2 ICT Technologies in ManufacturingTo integrate the high level of process optimisation and control with advanced con-cepts of manufacturing organisation, innovative planning methods are needed.Therefore, the automotive industry has widely adopted approaches for using virtualreality for planning of manufacturing. The method of „Digital Mock Up“ that wasdeveloped from 3D CAD has been long adopted by the industry. At the moment, itis sought to integrate all levels of simulation to a „digital factory“. Though this ex-pression is very often used nowadays, the realisation of the concepts will be posingresearch problems until 2020 at least. At the moment, there is a multitude of prob-lems in integrating even low levels of factory planning. Furthermore, it seems that28 For a detailed description of near net shape processes see CMI strand report especially Annex I29 see CMI strand report Annex I „intelligent processing“ for detailsFutMan Project: Case Sector Report Automotive Industry/Personal Cars
  28. 28. 25engineers do not always easily take up these technologies as an aiding tool but pro-ceed on their usual way of planning.“VR is encountering the same problem as CAD did at its first introduction: In the beginning the penis always faster” (automotive OEM)As the digital factory is embracing all sorts of human knowledge and human activi-ties, several aspects of social sustainability are encountered. To realise a sustainablekind of knowledge production it is highly important to integrate different kinds ofknowledge into modelling procedures in a participant approach.30 Funding shouldtry to strengthen this point of simulation research. Car manufacturers offer an idealstarting point for such interdisciplinary simulation efforts mainly due to two rea-sons. On the one hand, technologies aiding virtual manufacturing are relativelywidespread in the automotive sector and, on the other hand, there is a tradition ofadvanced and participant approaches on organisation of work.4.2.3 Diffusion of Existing TechnologiesIn the strand report “transformation processes”, the difference between first R&Dsuccess in manufacturing processes and the widespread application of these proc-esses especially in SMEs was emphasised. It has been shown how different manu-facturing technologies are adopted by companies at different speed. In the automo-tive sector where there is an enormous span in sizes of companies along the valuechain this is especially important to keep in mind. Asynchronies in technologicaladvances between suppliers and OEMs will cause decreases in competitiveness forthe whole demand and supply chain. Therefore, “diffusion” should be considered asa major aspect in research projects dealing with manufacturing processes in theautomotive sector.Regarding diffusion, it is important to realise that this does not only mean applica-tion of already developed concepts. It has to be acknowledged that, in the course ofits application in different contexts of manufacturing as well as in companies withdifferent organisational needs, the processes are continually reshaped. This adapta-tion to special needs is vital for successful diffusion with a positive influence oncompetitiveness. Therefore, even when research is envisaged with a time perspec-tive of 2020, the continuous further development of existing technologies shouldnot be neglected. Especially with the aim to foster sustainable manufacturing solu-tions, there is a high potential in the adjustment of existing clean technologies to thedemands of different applications and to promote their quick diffusion also to30 This aspect has also been stressed in the strand report transformation processes, where simulation turned out to be one of the most important enablers for future manufacturing processes.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  29. 29. 26SMEs. The competitiveness of the whole European automotive sector is dependingon successful diffusion of advanced manufacturing concepts.Examples for technologies that are already developed but where a high potential isstill to be expected by further diffusion and adjustment are:• advanced automation concepts,• teleservice,• man-machine interfaces,• dry processing,• laser-technologies.4.3 Skills and CompetenciesThe technology trends that were described are influencing changes in the demandson skills and competencies. It is obvious that the increasing need for simultaneousoptimisation of materials and processes is leading to an increasing demand on theability of interdisciplinary teamwork and communication skills.31 This holds forstaff at every position in the manufacturing enterprise but especially for R&D per-sonnel. For several reasons this is even more urgent in the automotive sector than inother industries. Because many production steps are done by specialised companiesthere is a high necessity to communicate between experts from OEMs and suppliersat different levels. The increasing amount of electronic components in cars (seeabove) is demanding an integration of electronics and other design issues. Softwareconcepts have to be integrated and adapted to the hardware needs.New design tools that help to integrate new concepts like virtual reality for factoryplanning have to be understood and used. With the increasing need for modelling torealise advanced process control and high levels of automation, the importance ofbasic sciences in manufacturing is widely expected to rise.From this multitude of new requirements, it follows that, for the product design aswell as for process planning in automotive manufacturing, people being able to in-tegrate several technological “worlds” are needed. There are different views as towhether teams of specialists being able to communicate with each other or promo-tion of generalists will be the right solution.31 The automotive working group considers new interdisciplinary skill requirements being a robust trend in the future.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  30. 30. 27“scarcity of people with the right knowledge in software could delay the virtual factory, which weare awaiting” (automotive OEM)Several interviewees pointed out that mechatronics which integrates several of theseaspects is rather a way of thinking than a specific technology and that the “mecha-tronics philosophy” needs to be taken up by designers to a larger extent.On the workers level, the handling of electronic components (in automated manu-facturing systems as well as in the cars themselves) will require several new skillsand competencies. IT knowledge will become still more important and should there-fore be integrated in professional education.It seems that at the moment the automotive industry is struggling with these prob-lems on both levels.“Operators need increasingly more training. The engineers have to use simulation programs using3D. In general, multidisciplinarity will be important.”(supplier of assembly lines to automotive OEMs)Some studies mention that qualification planning should be done with a longer per-spective and Foresight activities should be evaluated early with respect to their im-plications for qualification requirements.Finally, several interviewees expressed how a high level of basic knowledge willbecome necessary for all personnel in the automotive industry. Furthermore, it isthought that the ability to solve problems will become more important than a highamount of stored knowledge. It was repeatedly stated that flexible manufacturingprocesses need intelligent interfaces between man and machine, which meanshighly developed man machine interfaces on the one side and highly competenthumans on the other.“Combining knowledge of different areas is essential to handle multi-material design, teams of spe-cialists are required, communication skills across expertise are important, international thinking iscrucial.” (automotive OEM)“Humans should be kept out of manufacturing wherever possible to avoid mistakes.” (automotivesystem supplier)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  31. 31. 284.4 Summary: Technological Items for the Research and Policy Agenda“The one litre car is possible even now, but research costs are so high that the car will be much tooexpensive to be sold. Car manufacturers are not able to finance such projects though they can beused to learn from for current developments. In the future, situations like this where there is a gapbetween what can be done and what is done will become even more common” (automotive OEM)In the following section, several technology topics will be listed that were derivedas possible issues for research that would help to ensure competitiveness of Euro-pean car manufacturing. It is obvious that the automotive industry will take up mostof these research topics without public R&D funding. Nevertheless, as becomesclear from the above citation, car manufacturers, for obvious reasons, will not govery much beyond what is regarded necessary from an economic and market pointof view on their own. Furthermore, sustainability criteria will not be integrated inthese research projects as much as they could be.As the directions of many developments are still unclear and a large diversity ofconcepts is emerging, it seems reasonable to employ highly targeted funding strate-gies to bring sustainability issues into all the research topics that are important inthe sector at the moment instead of focussing on particular technologies. Hopefully,from such a multitude of approaches, a variety of customised sustainability solu-tions adequate for different contexts will arise.For the reasons named above, the list presented here should be seen as tentative.Final conclusions should only be drawn in connection with the results from the fol-lowing sections. In addition, it should be noted (as was discussed in more detail inthe strand report on transformation processes) that diffusion of technologies that arecurrently established only in some companies might be well worth funding for rea-sons of competitiveness and sustainability.“Many of these technologies are already under way or even used by advanced large-scale manu-facturers, but are still far from being applied by SMEs.” (Materials and Mechatronics expert fromresearch unit)Interviewed experts from industry pointed out that funding should emphasise fastand cheap applications. It was proposed to build pools of possible users for researchprojects as well as joint projects between providers (e.g. of software or machinetools companies together with users). It was mentioned how there might be resis-tance to co-operate between competitors, but that such co-operations will be essen-tial for European competitiveness.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  32. 32. 29In the following overview, areas of research topics that can be derived from thetrends described above are listed. Specific topics that were mentioned by the inter-viewees are assigned to these groups. Possible sustainability concerns are also men-tioned.Design and manufacturing of light weight materials• titanium extraction (lower price)• joining technologies for different light weight materials with view to recycling / re-manufacturing• coloured plastics (alternatives to classical coatings)Advanced manufacturing processes• laser technology• mechatronic• rapid manufacturing, rapid tooling• nanotechnology for coatings, sensors, and catalysts• hydroforming (or other methods for varying material thickness (in the same piece)• soldering without lead (process control, quality assurance)• manufacturing of multi-material components (with an integrated assessment of sustainability concerns like recycling and emissions but also effect on working conditions in manufacturing).Near net shape processes• powder-metallurgy, sintering (especially application oriented, view to recycling important)• rapid manufacturing• closed mould injection processes (aid small companies)Process simulation• simulation of new materials as well as simulation of the interface between tools and materials• simulation of forming processes especially bending e.g. of magnesium. Actors from software suppliers as well as manufacturers have to be involvedPlanning and control of manufacturing processes• methods for recycling environmentally friendly product and the process design needed in order to produce them• integrated automation concepts• control technologies with adequate sensors (especially for welding and bending)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  33. 33. 30• standards for electronic systems as well as for software and control systems• man-machine interfaces• virtual reality for planning of manufacturing (with a view to social sustainability aspects)• simulation and expert systems to aid quality control in electronic systems pro- duction (reliability-simulation), especially for soldering. Possible research con- stellation: European user and provider companies in soldering. This project would especially aid soldering without lead.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  34. 34. 315 Production StrategiesThe companies in the automotive industry follow different strategies in order tocope with developments in their environment including markets, competitors,regulation, shifts in values, economic cycles, societal demand, factor cost and avail-ability. Quite contrary to the situation a few years ago with „lean production“, theredoes not seem to be „one best way“ how to organise the production of cars. At thesame time, strategies are not only a (re-active) answer to the outside world. Theyare also to a great extent original solutions taking into account enabling technolo-gies and ideas or progress in relevant sciences thus incorporating technological aswell as organisational, managerial, or qualification measures. The main (future)demands realised by the automotive experts we talked to do not surprise: increasedflexibility, growing individualism, speedy innovation, continuous cost reduction.However, some issues should be noted that are not so generally referred to: betterreliability/quality, extended functionality, improved sustainability. These issues arerather considered as (current) problems than as (future) trends or requirements andmay thus be underestimated in their relevance as drivers.In the recent past, a number of trends in the automotive industry have been obvious,namely a sharp decrease with respect to the number of independent OEMs and theopposite trend with respect to brands and car models. However, it is far from clearwhether this will continue. This is also true for the share of work between OEMsand suppliers. In the last years, the vertical range of manufacture has dropped withOEMs quite significantly from 23 to 30 % while the supply volume has quadrupled.In this context, new forms and frontiers of competition arise or are already to beobserved. Besides the horizontal competition between suppliers for a certain part (orsystem),• manufacturing departments of the OEMs compete with suppliers,• decisions on the vertical division of work within a supply chain become less ob- vious, and• tasks shift between the production and the service sector in both directions.In the interviews with automotive experts the project team tried to identify typicalgeneral as well as individual strategies in the sector. This was only partly successfulfor two reasons. Those familiar with company specific strategies were often reluc-tant to disclose them. Others, addressed as technical experts, hesitated to talk aboutsuch aspects in more than a fairly general way. Given this background, in thischapter, which discusses several issues including supply chain management, neworganisational concepts, e-commerce, globalisation, clusters, mass customisationetc. , we refer to existing studies to add to the results from the interviews.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  35. 35. 325.1 Restructuring the Value Chain: Options for Different Ac- torsThe OEM as a brand owner reduced to core competencies such as design, market-ing, and (possibly) system integration (PricewaterhouseCoopers, 2000) constitutesthe one end of the spectrum of possible futures of the automotive industry. The (re-)integration of sales, design, manufacturing, re-manufacturing and recycling withOEMs could be the other end. The decreasing vertical range of manufacture withOEMs, the growth of contract manufacturing by specialised companies/assemblers(like Valmet or Magna), or the increasing responsibility of suppliers – and engi-neering firms – for technological innovation seem to support the first vision.32However, there are some indications of a shift back towards the latter. Some OEMsseem to be re-thinking their core competencies and others are aiming at building-upor maintaining production/process knowledge by increased R&D for example.Another dimension of the restructuring is the geographical allocation of the supplychain. Again, the spectrum is broad and ranges from local clusters („supplierparks“) to global sourcing concepts („world-wide trade of parts“ VDA, p. 53). Di-verse concepts such as “manufacturing close to the market” or “centralisation inorder to achieve economies of scale” are emerging in parallel. The respective sizeand integration of the sites belong here as well. Several new and specific plant con-cepts such as the „gläserne Manufaktur“ (transparent craft factory) of Volkswagenin Dresden, Germany, or the SMART manufacturing consortium in Hambach,France, have been developed. Green field sites with comprehensive compensatoryecological measures (e.g. Rastatt factory of DC in Germany) exist beside ambitiousattempts of “sustainable factory renewal” (e.g. Rouge factory of Ford in USA). Es-pecially where space is disposable, condominia of OEM and suppliers are tested(e.g. Skoda).Consequently, there are different types of supply chains and supplier roles. Thesuppliers respectively need and have different competencies. Although a furthersegmentation and specialisation of the value chain is expected along dimensionslike innovation and cost, application and process, or niche and volume33 a largevariety of successful strategies may still be performed. Even if the predicted con-centration of the automotive suppliers (e.g. Mercer/HypoVereinsbank, 2001: “thetop 20 will share 50 % of the volume in 2010 against 27 % today and only 3500 of5500 companies will survive”) is realised there is room and need for different busi-ness models (see figure 5.1-1). The diversity of company competencies and their32 cf. VDA, AUTO Jahresbericht 2001; Nederlandse Vereniging Algemene Toelevering (NEVAT), 2002a, pp. 9, 13, 14; Mercer und HypoVereinsbank, 2001d; Jürgens, 200233 cf. for example: Jürgens 2002; Nederlandse Vereniging Algemene Toelevering (NEVAT), 2002b p. 13 ff; Mercer/HypoVereinsbank 2001, p. 9 ff.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  36. 36. 33interlinkages – e.g. through the sharing of platforms – may actually be an importantsuccess factor for the automotive industry in Europe to achieve both innovation andproductivity. Thus suppliers become an important driver for innovation.“Instead of waiting for the OEM’s demands it is important to initiate own innova-tions.” (component supplier)Figure 5.1-1: Supplier Strategies ⊕ component specia- Module/ list ⊕ Supplier of system specialist System volumes integrator Niche markets ⊕ Source: Mercer 2001Jürgens (2002) suggests that there is a distinctive European approach how the inter-action and specialisation between OEMs and suppliers is organised, using terms like„new network approach“ (p. 32) or „emerging network structures“ (p. 36). He con-cludes that this kind of concept dominated in the late 1990s and may lead in thefuture to advantages over the „pyramid structure of hierarchical OEM-centred sup-plier relations found in Japan“ (Jürgens, 2002 p. 36). The US automotive industrywith their OEM-owned but not OEM-centred mega suppliers seem to be in an in-termediate position. But also in the European approach, the relationship betweensupplier and OEM remains augmented with conflict.“OEMs are on the one hand meddling with the processes of their electronic systemssuppliers on the other hand they are calling for them to take full responsibility”(electronic systems supplier)FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  37. 37. 34While the restructuring of the supply chain and related strategies are very muchdiscussed with respect to the future of car manufacturing other, more radicalchanges which question the current product and production paradigm played a verylittle role in the several strategic studies and in our interviews, too. They largelyseem to be limited to scientific and partly political debates under the heading „fromthe automotive to a mobility industry“ (Volkert, 2002). Such new concepts wouldvery much concern the distribution chain and the relation to the customers: New co-operations to better integrate different modes of transport would emerge. Finally,instead of selling a car together with services a service (mobility) together with (theuse of) cars would be sold. This would certainly have consequences for the designof cars (modularity, robustness, up-gradability, etc.) as well as for the design ofother modes of transport and the infrastructure, and in turn for the manufacturingprocess (cf. expert group 2001 and their concept of sufficiency). Product and manu-facturing technology may lose in importance for OEMs (Matthies and Heideloff,2002, p.8). Already, they are increasingly concerned with improving their compe-tencies in services, distribution, or aftersales support. They also face competition inthis respect. However, these activities are still either confined to small market partsas car rental or meant to support traditional selling of cars. A shift towards „sellingcustomised mobility“ which could very much improve sustainability of the transportsector and related industries is unlikely to emerge as a self-driven sector strategybut would require favourable political and societal framework conditions as it hasbecome very clear from the results of the FutMan scenario workshops (see alsochapter 7).5.2 Flexibility and Customisation: New Techno- organisational Concepts in the Automotive IndustryTen years ago, the Japanese model „lean production“ was the portfolio for organis-ing manufacturing processes. Today it is obvious that there is more to being com-petitive although many elements of the lean production concept have become stan-dard means of organisation. Building on particular traditions of industrial relationsand participatory organisation, European firms have successfully gone even furtherwith respect to team work, designing holistic tasks, or increasing worker responsi-bility (Jürgens 2002, p. 14 ff.). However, it seems that today the efforts for organ-isational modernisation of the production in the automotive industry are slowingdown and steps back are even taken in some companies. The interviewees alsorarely referred to organisational modernisation in forms like „lean production“ as avery relevant strategy. But the automotive industry still is at the forefront and asfigure 5.2.1 shows, has forced its suppliers to apply the concepts.FutMan Project: Case Sector Report Automotive Industry/Personal Cars
  38. 38. 35Figure 5.2-1: Use of Selected Organisational Concepts by Automotive Suppli- ers Compared to Other Company Groups in Germany 70 % automotive suppliers 60 suppliers to other sectors (only) 50 final producers (only) 40 30 20 10 0 mass customization process cost calculation simultaneous temporary development target costing engineering teams Source; Fraunhofer ISI manufacturing innovation survey 2001 (n=1630)While the lean production concept – even in the European approach – focused pre-dominantly on productivity and cost issues, today flexibility and the ability to cus-tomise products are gaining importance. One of the major problems in this respectis how to handle increasing complexity and how to ensure integration while main-taining economies of scale and keeping capital lockup in manufacturing equipmentunder control.The most important and also common strategy in this respect is the use of platformsand modularisation („construction kits“). This is done on different levels of the sup-ply chain and with respect to the product as well as with respect to the manufactur-ing equipment. Almost all interviewees underlined that these concepts are kept atthe back of everyone’s mind. However, there seem to be different approachesamong OEMs in Europe and in Japan of how to balance the reduction of complexityon the one hand and the integration of the different modules and systems into oneworking car on the other hand. While European companies rely increasingly onnetworking with strong, independent suppliers, the Japanese tend to a more hierar-chical system (Jürgens, 2002). While the first seems to have advantages with re-spect to innovation the second may foster the reliability of the car as a whole.Another means of reducing complexity and making the manufacturing process reli-able and flexible could be the localisation of production in possibly smaller facto-ries close to relevant markets. However, references to such philosophies were rathermade in the context of the vision chapter of our interview guide (see boxes) and inthe scenario workshops than with respect to actual strategies. But recent new fac-tory projects show that this path is possible.FutMan Project: Case Sector Report Automotive Industry/Personal Cars